If you use the example you post, then you will display only the first byte and continue to display that exact byte endlessly.

If you send serial data then the buffer of the 2-byte long USART will overflow and depending on the setup will stop with error flag raised or replace old bytes with the new ones.

Please refer to your Data sheet of the PIC you are using for more infos about the USART and its associated flags and control bits.

If serin/serout work then I am sure that USART will work better and without having PIC to deal with the data untill they are available to process. You must have something wrong with your setup.

As Steve stated without the whole picture we can only guess.

Here in Greece we had the ancient times the oracle at Delphi and Pythia making guesses and prophecies but nowadays I suppose it is better to see, measure calculate and then conclude. So if you want real help post all you got (schematics, cablings, software, defines etc).

Ioannis